2023-08-08 15:51:12
In the heart of summer, the announcement was surprising and the markets reacted to the extent of the shock. At the end of a late Council of Ministers, Monday August 7, the Vice-President of the Italian Council Matteo Salvini (League, far right) unexpectedly announced a measure providing for a 40% tax on “surpluses” banks. This provision was unexpectedly slipped into a catch-all decree law called “Assets, economic activities and strategic investments”, covering matters ranging from taxi licenses to foreign investments.
On Tuesday, the markets responded spectacularly by plunging the securities of Italian banks on the Milan Stock Exchange. At midday, BPER Banca lost 8.86%, Banco BPM 7.93%, Intesa Sanpaolo 7.51%, UniCredit 6.14%, Mediobanca 2.18% and Banca Monte dei Paschi di Siena (MPS , owned by the Italian State) saw its share fall by 8.01%.
The extraordinary tax wanted by the government, dominated since October 2022 by the extreme right of Giorgia Meloni, has been presented as “a measure of fairness” by Mr. Salvini. This is a response to the continued increase in interest rates by the European Central Bank (ECB) and to the additional costs that it causes to households, the additional profits that it has allowed the banks to reap not being accompanied by better remuneration of their customers’ accounts. The new tax with retroactive effect, of which Rome estimates that it will contribute 3 billion euros to the State budget, should thus allow the executive to finance public aid for first mortgage loans, a reduction in taxes as well as other tax measures in favor of individuals and companies.
Measure for indebted households
This decision is primarily aimed at households which, having taken out loans at variable rates, are penalized by the ECB’s monetary tightening policy. Many Italian families are thus finding it difficult to pay drafts which weigh heavily on their already strained financial situation in an Italy still affected by commodity inflation. Being the subject of particular attention from the executive, the cost of bank loans is also at the heart of a latent dispute between the institution chaired by Christine Lagarde and the Italian government. Rome has in recent months repeatedly criticized the ECB on behalf of borrowing households and investors.
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